1- When a price ceiling is imposed, long lines are likely to follow. The value of the time wasted waiting in these lines should be equal to the difference between the market equilibrium price and the imposed price ceiling.
Suppose that demand for a good is given by Q = 122 - 3P, while supply for the good is given by Q = 1P - 20. The average person values their time at $12.29/hour. If a price ceiling of $11.04 is imposed, how many hours will the average person have to wait in line?
2- Suppose that demand for a good is given by Q = 132 - 3P, while supply for the good is given by Q = 2P - 5. If a price ceiling of $11.96 is imposed, what will be the area of the deadweight loss?
3-
The unemployment rate is the percentage of workers who are seeking a job at the prevailing wage, but who are unable to get one. When a minimum wage is imposed, it creates some unemployment among minimum wage workers.
Suppose that the demand for labor is given by Q = 56 - 1W, where 'W' is the hourly wage rate, and the supply of labor is given by Q = 5W - 5. Imagine that a minimum wage of $22.68/hour is imposed by law.
What will be the unemployment rate for workers in this market?
1- When a price ceiling is imposed, long lines are likely to follow. The value of the time wasted waiting in these lines should be equal to the difference between the market equilibrium price and the imposed price ceiling.
Suppose that demand for a good is given by Q = 122 - 3P, while supply for the good is given by Q = 1P - 20. The average person values their time at $12.29/hour. If a price ceiling of $11.04 is imposed, how many hours will the average person have to wait in line?
2- Suppose that demand for a good is given by Q = 132 - 3P, while supply for the good is given by Q = 2P - 5. If a price ceiling of $11.96 is imposed, what will be the area of the deadweight loss?
3-
The unemployment rate is the percentage of workers who are seeking a job at the prevailing wage, but who are unable to get one. When a minimum wage is imposed, it creates some unemployment among minimum wage workers.
Suppose that the demand for labor is given by Q = 56 - 1W, where 'W' is the hourly wage rate, and the supply of labor is given by Q = 5W - 5. Imagine that a minimum wage of $22.68/hour is imposed by law.
What will be the unemployment rate for workers in this market?
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Consider now the information about the supply of labor in the file named Supply of Labor - HW2. Combine this information with information about the demand for labor in the previous question. What are the equilibrium levels of real wage and employment?
Equilibrium Real Wage = () units
Equilibrium Level of Employment =() Workers
Consider the demand and supply information in the previous questions. What is the level of potential GDP in this country?
Potential GDP = units.
Consider the demand and supply information in the previous questions. Suppose that currently, the nominal wage is W = $1,000 and the price level is P = $20. Then, there are jobs available in the economy and workers are willing and able to work.
Consider the demand and supply information in the previous questions. Suppose that currently, the nominal wage is W = $1,000. If the price level increases by 25% and if the nominal wage does not change, There will be jobs available in the economy and workers will be willing and able to work.
Consider the demand and supply information in the previous questions. Suppose that currently, the nominal wage is W = $1,000. If the price level increases by 25% and if the nominal wage does not change, the labor market will be thrown out of equilibrium. To restore equilibrium, the nominal wage must change to dollars.
